Analysis of Water Tariff Reform on Water Consumption in Different Housing Typologies in Calvia (Mallorca)

This study analyses water prices and residential water consumption using micro data for three different housing typologies in Calvia with contrasting household characteristics. We examine the effect of a price reform of the sanitation fee (implemented in 2013) on the average prices and their water consumption in each of the areas. Our results conclude that the aggregate water consumption decreased only during the year of the reform, but increased the following year. The increase in the amount of water consumed by the houses of higher standards of living was greater than the small decrease in water consumption by families with medium and low-medium incomes. Thus, the reform had a very modest effect as regards reducing water consumption, and many households increased their consumption despite the higher prices. From a water policy perspective, we recommend a water tariff scheme differentiated according to the housing characteristics in order to find the most effective and fairest way to save water.